The approval is in line with the Indudtry Ministry policies on productivity and intellectual property.

Speaking after the board met yesterday, Industry Minister Kosit Panpiemras said the BoI would encourage local industries to invest more in R&D, which would boost their competitiveness in the future.

The BoI grants tax incentives on imports of machinery and equipment for use in R&D and exempts 70 per cent of a project's income tax for three years. All projects must join with academic institutions or universities, and the value of projects must not be more than Bt10 million.

"We limit a project's value because we want to promote SMEs more than big companies," he said.

Another condition is that applicants must be local companies or local citizens holding more than 51 per cent of total shares.

Moreover, the BoI yesterday approved zero tax for eight years for four kinds of biotechnology businesses. If a business locates in the Thailand Science Park, it will also get a 50-per-cent reduction in income tax for another five years.

They involve biotechnology for improving plants and animals, medical products and micro-organism industries; and tools for investigating food, medicine, agro-products and the environment. Formerly, the BoI provided different tax incentives for businesses involving biotechnology. This is a new measure that focuses for the first time on promoting biotech across Thailand.

To boost export competitiveness, it will also promote a logistics park with income tax exemption for eight years in each area.

However, a park must cover an area of more than 200 rai and have not less than 50,000 square metres of warehouse facilities on the land. It must be no farther than 50 kilometres from a port, airport or customs border point.

Meanwhile, secretary-general Satit Chanjavanakul said the BoI had granted more tax incentives for shipyard industries in Zones 2 and 3.

"Most of the country's shipyards are in Zone 1. This policy is aimed at attracting operators to invest in this business in other zones, in order to strengthen the country's potential as a water-transport centre in this region," he said.

Thailand's revenues from constructing vessels last year was Bt2.5 billion, up 400 per cent from 2005. This industry is forecast to grow considerably thanks to of the private sector's rising demand for ships, both locally and internationally.

 Yesterday, the board approved tax incentives for six projects worth Bt70.47 billion. Two are ethanol projects from Impress Technology and Sapthip that conform to a National Energy Committee policy.

Another is a billet project by Siam Yamato Steel. The fourth is a project of Bergsoe Metals to expand its production capacity for lead ingots. The others are a cargo-transfer business by PTT LNG and a natural-gas separation plant by PTT.

Chalida Ekvitthayavechnukul

The Nation